So You Think a New Prison Will Save Your Town?

Six reasons you’re likely to be disappointed

Officials in Letcher County, Ky. — where roughly one in four people live below the poverty line — are banking on a new federal prison as the solution to the area’s high rate of unemployment. Plans to build a high-security, 1,200-person facility in the coal country town are nearly final, after a decade of effort by the region’s representative, Hal Rogers, R-Ky.

“Unfortunately, the prison business is essentially recession-proof and they are built to last,” Rogers told a local paper in 2006.

Rogers and members of the local planning commission have said staffing the facility could create up to 300 jobs, not to mention the many more needed to construct it. The median household income in Letcher County is less than $32,000 and unemployment in 2014 was about twice the national rate. When Congress allocated $444 million to build a new prison, the commission members called it “a great Christmas gift to Letcher County” and “almost more than we could ask for.”

But it’s unclear how many of those 300 positions will actually go to Letcher County residents. An Environmental Impact Statement prepared by the Environmental Protection Agency notes that many—possibly all 300–could be filled by existing Bureau of Prisons employees. Proponents of the prison admit that the Bureau will likely need to bring in many of its more experienced staff to open the prison.

For years, the Bureau of Prisons touted to Congress the economic benefits its facilities brought to rural communities. “The BOP’s positive impact on rural communities is significant,” the agency told lawmakers in its fiscal 2016 budget report.

“By bringing in new federal jobs, stimulation of local businesses and housing, contracting with hospitals and other local vendors, and coordinating with local law enforcement, the BOP improves the economy of the town and the entire region where these rural facilities are located.”

The rural prison building boom that began in the 1980s roughly coincided with the farm crisis. Rural communities that once might have opposed putting a prison in their backyards became more receptive, hoping it would bring a new employment base and possibly new prosperity.

Despite claims from the bureau and other prison boosters, research suggests that prisons rarely bring significant economic improvements to rural communities where they are pitched as a salvation. Here’s what the studies show:

1. Prisons haven’t delivered the economic benefits they promised, especially in rural towns. A 2010 study found that in rural counties, particularly those whose residents have lower levels of education, “new prisons may be doing ‘more harm than good’ in vulnerable counties.” The study examined the change in employment, in the public and private sectors, for every county in the lower 48 states from 1976 to 2004. The researchers compared how counties with prisons perform versus those without and found that after 1990, there was no link between prisons and a growth in employment. (An earlier study by the same authors found that prison construction led to slower growth in the employment rate). Moreover, for counties with lower rates of educational attainment, prisons were inversely related to employment growth.

Another study evaluating the effects of prisons built in the 1990s found that unemployment rates were roughly the same in towns with prisons as in those without. It also showed that towns with new prisons experienced much lower increases in employment, retail sales, household wages, housing units and home values when compared to towns without prisons.

2. Jobs at new prisons generally go to people who already work in the system. Veteran corrections officers at older facilities usually get first dibs on the new jobs. In a study of new prisons in California, an average of 20 percent of the new jobs went to county residents. In another instance in Missouri, fewer than one-third of the jobs were filled by locals.

Letcher County is trying to better prepare community members to apply for the jobs by offering criminal justice classes at the local college. Roughly 75 percent of Letcher County residents have a high school education or higher, compared to 90 percent of all Americans.

3. Those corrections officers who get jobs at the new prison often don’t move into the community, so there's little gain in home ownership, voter registration, tax base or other civic investment. They opt to commute long distances from urban centers to their new jobs. One study found that California prison employees commute about twice as far as other workers. “Those people who never move, they wouldn't be residents and they're not voters,” said sociologist Gregory Hooks, who has analyzed the economics of prison building in several nationwide studies. He added, “For those people who do move, they'd be tenuously attached.”

In a town hall meeting about the forthcoming prison, Kentucky Gov. Matt Bevin noted that when a prison came to his hometown, “The quality of life began to go down...and the number of people who really had roots in the community began to change.” Letcher County officials have announced plans to build new housing in hopes of attracting prison employees to live closer to work.

4. Building a prison doesn’t necessarily attract other businesses that would bring more jobs. Nobody wants to build a new big box store near a prison. Thomas G. Johnson, a professor emeritus at the University of Missouri and an agricultural economist who has studied the American rural economies for decades, has seen that prisons rarely spark the wave of related business development their proponents wish for. "Manufacturing plants always are more advantageous to the community than the prisons," Johnson explained to the Federal Reserve Bank of Minneapolis’ FedGazette in 2002. "The prisons generate very few linkages to the economy."

5. The influx of prisoners is a source of cheap labor that can crowd out local businesses and services. Prisoners tend to handle custodial, laundry and food service jobs within a facility, as well as provide labor for public and private employers on the outside. Often they work for pennies an hour. The Oregon Correctional Enterprises, a semi-autonomous state agency, boasts that it provides work for more than 1,300 prisoners in industries that include crafting furniture and operating telemarketing call centers. Inmates handle printing, mapping and phone services for other state agencies. In Louisiana, where many state prisoners are housed in parish jails, local factories, gas stations and even local churches have hired prisoners. Among the major corporations that have used the labor of incarcerated workers are Microsoft, Nintendo, Dell, Chevron, IBM, Victoria’s Secret and Honda.
“Instead of expanding the aggregate number of jobs, local residents compete with prisoners for jobs, especially on public works projects,” Hooks wrote in his 2010 study.

6. Locals often don't have the skills or union connections to get construction jobs to build the prison in the first place. And local governments, desperate to secure a new prison that could go to another county, will often forego requirements that a certain number of jobs be set aside for their constituents, according to a 2003 study of prisons in New York state by the Sentencing Project.